amend previous year's tax by adding foreign financial income

[DaveF1006]

It depends.  A 8621 is filed if you are a shareholder of a Passive Foreign investment Company (PFIC): This would be filed if you:

1. Receives certain direct or indirect distributions from a PFIC.  This include distribution of dividends.
2. Recognizes gain on a direct or indirect disposition of PFIC stock,
3. Is reporting information with respect to a Qualified Electing Fund (QEF) or section 1296 mark-to-market election,
4. Is making an election reportable in Part II of the form, or
5. Is required to file an annual report pursuant to section 1298(f). See the Part I instructions, later, for more information regarding the person that must file pursuant to section 1298(f).
6. There is no threshold regarding the $ amount of distributions thus any amount paid should be reported on a 8621.

Please, read this IRS article for further assistance.  

[cathiexu]

Hi @RalphH1 , one follow up question regarding 1040X.

In my original return, I didn’t attach schedule B as it doesn’t exceed threshold . By adding  this additional foreign interest, the total interest income still doesn’t exceed $1500. 

you mentioned to add “statement” instead of schedule B.  What do you mean by statement? I thought there is a section on 1040x to explain what was amended. Other than that, did you mean to put an extra normal A4 paper where I type something to explain what this interest income is ?

thanks!

[RalphH1]

There is the $1,500 threshold, but also the “interest in, or signature authority over, a financial account in a foreign country…” official filing requirement for Schedule B (here). My thinking was that this applied to your situation, so Schedule B was officially called for (with a statement added if more space was necessary, but not for redundant info that already fits on Schedule B and the 1040X). The other agent (Mary) recommended a statement, and that would work fine too, as long as you give the IRS the info (and the tax due, of course!).

@cathiexu, I admire your attention to detail, but I hope you’re not stressing-out about all of this. You’re obviously going to great lengths to fulfill your tax obligations, so I’m thinking the IRS likes you too!

[cathiexu]

Thanks @RalphH1 , I appreciate your patience answering my questions. It is been a stressed out week to understand and file amend for the first time as work visa holder in the U.S., I appreciate all your valuable input here and thanks for your understanding!

[RalphH1]

You're very welcome, @cathiexu! I've really enjoyed this project here. And I hope your stay in the U.S. (except for the many hours of tax preparation...) has gone well so far!

Feb 17, 2023 at 9:33 AM